Professors and students across the College of Business have been studying the changing economic landscape to better position themselves as entrepreneurs and educators.

We talked with four Colorado State University graduates and two business educators to share their best approaches for creating successful crowdfunding campaigns and to see where the industry is headed next.

David Hunt’s first Kickstarter crowdfunding campaign only had nine followers and didn’t even hit a quarter of its goal. But less than five years later, the College of Business Global Social and Sustainable Enterprise MBA graduate’s newest project, monkii bars 2, broke the $1,000,000 mark in 42 days, launching the exercise company he co-founded into high gear.

After Hunt’s company eclipsed $50,000 in an hour, he had a simple reflection on the experience.

“It’s a great time to be an entrepreneur.”

As a student in an entreprenureal graduate program, he was surrounded by faculty and classmates who supported his business-oriented mindset.

“So on a day to day basis I’m looking around the world, kind of noticing problems,” said Hunt, “And thinking, ‘Okay, how could I solve that with a business or a product.’”

What Hunt and his co-founder, Dan Vinson, settled on was addressing the poor-quality outdoor gym equipment. Through developing a solution they came to monkii bars, a portable suspension training kit that can be used over tree limbs, doors, and even off the side of a hot air balloon.

Looking for funding to get their prototype off the ground they soon turned to crowdfunding.

“Everything was new to us. We had never made a product before, we had never manufactured anything, we’d never shipped anything to customers, we’d never had customers.

“We literally knew nothing,” said Hunt. “We basically needed Kickstarter to tell us if we had a good idea or a bad idea.”

Learning from his missteps and successes, Hunt has been sharing what he knows about the platform and business to help students, entrepreneurs, and creatives build successful campaigns.

1. Make a good product

“You have to make something that people want,” said Hunt. “That’s the first question you need to ask yourself… Are people going to buy this?

“We weren’t sure if we were crazy at that point.”

A concept sketch of the original monkii bars from David Hunt’s campaign.

Kickstarter is great way answer that question and assess market demand, but if you don’t put thought into developing your concept people will be less likely to respond to it, regardless of how well it’s marketed.

“We basically needed Kickstarter to tell us if we had a good idea or a bad idea.

“Dan and I had wasted time on other business ideas,” said Hunt, recalling a goal from their first campaign: What’s the quickest way to test this idea?

2. Build community support

Even before launching monkii bars 2, Hunt’s company had an established group of people they knew would be interested. 500 backers of the first monkii bars supported the project on day one, giving the company a huge boost.

In the original monkii bars campaign things were a little different.

“Dan and I don’t have 500 friends and family that are going to give us money, so we were limited there,” said Hunt.

But that shouldn’t stop people from trying to spread the word about the campaign before it goes live, connecting with people who might want to contribute, including friends and family.

3. Start strong and get an algorithmic boost

“If you blow through your goal on day one, you’re a success from day one. From a backer’s perspective there’s no ambiguity of, ‘Is this project going to come to life?”

Hitting 1,000 backers was a big milestone.

Hunt says that Kickstarter’s algorithm is also structured to promote campaigns that quickly meet their goal, cycling them through the home page and featuring them alongside other popular projects.

The company also offered early bird rewards – their previous customers were the first to know about them – enticing people to buy at the start of the campaign.

“We built the buzz with that community and they showed up for us,” Hunt said.

4. Be prepared to deliver

“The thing with Kickstarter is it’s a blessing and a curse,” said Hunt.

“We had a general manufacturing plan, but it wasn’t detailed or really actionable, so we really had to figure everything out after we’d already sold the idea.”

They ended up assembling all of the original monkii bars by hand, fulfilling orders to over 900 backers with the help of family and friends, ultimately shipping a few months late.

But that’s where some of the benefits of Kickstarter came in.

Backers were pretty forgiving and more concerned with getting a quality product than having it by a certain deadline.

5. Don’t neglect the video

Kickstarter doesn’t require posting a video, but they report projects using them see higher returns and benefit from a 66% greater success rate than those that skip the step.

The video used for the monkii bars 2 campaign took a year to produce, including time spent on writing and rewriting the script, laying out the concept, and filming. And it shows.

College of Business graduate Chelsea Williams with her company’s planner.

Co-Creator and Founder at Meraki Printing

In the midst of a Kickstarter campaign for her company’s 2017 Make Sh*t Happen Planner that more than quadrupled its $25,000 funding goal, Chelsea Williams shared some crowdfunding tips and reflected on how the College of Business helped her get an edge in the field.

What’s the most important part of a successful Kickstarter?

“Create a powerful video to showcase your product and tell viewers about yourself. Spend the extra money up front to hire someone to help you make your video as professional as possible.

“Your personal story is an integral part of your product’s story. I’ve found that crowdfunders want to believe not only in the product, but support the mission of the creators as well.

How did your class experiences help you in life after college?

“The College of Business prepared me to take ownership of my learning and of my work. The most influential classes I took as part of my finance degree program were the entrepreneurship classes. These classes encouraged me to think big, to think outside the box and to trust myself. Most importantly these classes taught me the value of asking for help and learning along the way.

“I realized I didn’t have to be the ‘expert’ on every business subject, but I had to be willing to ask for help and make mistakes along the way. It was in these entrepreneurship classes that my management, accounting, marketing and finance classes all came together. While my finance degree made me more of an ‘expert’ in finance, I knew enough about all the other subjects to figure it out in the real world.

Living Ink

After going through the College of Business’s Venture Accelerator program, CSU microbiology alums Steve Albers and Scott Fulbright launched their company Living Ink through a $60,000 Kickstarter campaign.

Steve Albers, co-creator of Living Ink, completed the Venture Accelerator program to help get his company off the ground.

Co-founder of Living Ink

As a CSU molecular geneticist working to engineer cyanobacteria, Steve Albers knows how to make algae grow. But when he and a fellow classmate got together to launch a company and sell the world’s first biodegradable time-lapse ink, they weren’t exactly sure how to make the business bloom.

“I made it explicit that one of our goals was we wanted to start a company,” said Albers. “We were going to learn by doing.”

But succeed or fail, he wanted to come away with the knowledge of how to create a startup and develop a company.

“Through this process we’ve learned to know what we don’t know, and to try and make connections to fill in those gaps,” said Albers. “The Venture Accelerator program was really valuable to help us open our eyes.”

With round-table sessions that gave the co-founders access to consultants, leaders in finance, product development, and crowdfunding, Albers and Fulbright were able to develop a strategy to jump start their company, Living Ink.

Video of Living Ink’s time-lapsing ink from their Kickstarter.

Getting results

“The impact was huge on our company,”Albers said.

The Kickstarter campaign they created ended up raising over $60,000, surging past their original goal of $15,000.

“People, I think, often make the incorrect assumption that you make a lot of money from a Kickstarter campaign that’s going to support your company for a long time,” Albers said.

But he pointed out that research and development are expensive, especially when you’re trying to grow your business.

“We didn’t raise oodles of cash, that can’t be the point.”

One of the things he found was most valuable about the campaign was the ability to meet multiple goals that helped aid their growth.

Looking back on the experience, Albers believes the insights gained from creating a Kickstarter campaign can be as valuable as the funding received.

Benefits besides money

Although it tends to be highlighted most frequently, cash isn’t the only thing that can help grow a business. After successfully funding his company’s Kickstarter campaign, Albers gained insights into a few of the lesser known – but equally valuable – ways entrepreneurs can take advantage of crowdfunding.

1. Gain media exposure

Boosting their visibility helped draw more customers to their company and created a stronger awareness of their product.

2. Identify unique audiences

One of the things that Albers noticed about people coming to their campaign was how distinct the audiences were.

“We started recognizing there were two very different populations here,” Albers said.

They noticed a number of artists who weren’t regular Kickstarter customers arriving at the company’s page to offer praise without necessarily contributing to the campaign. On the other hand more experienced users who knew how the process operated were coming in and supporting the efforts.

“I think that’s one of the inherent difficulties of trying to run a Kickstarter,” said Albers, comparing the process to pitching to venture capitalists and angel investors, where questions and concerns can be easier to predict.

Fans show off Living Ink design in the company's video, which reached over 6,000 people through the crowdfunding platform and YouTube.

3. Assess commercial viability

Seeing how wide your campaign spreads, and who becomes interested in your product, can be “unbelievably critical” and provide a great metric on how interested potential customers are. Also, having hundreds of people provide feedback on a Kickstarter campaign can be a huge help in identifying a product’s strengths and weakness.

4. Establish your company’s internal goals

Although the direction of Kickstarter is shifting away from product development and more toward helping finished products come to market, Albers and Fulbright were able to lay out a road map for the company’s growth to potential backers, which helped solidify the founders’ plans for their business.

Change Composites

When Nate Saam didn’t meet his company’s Kickstarter goal of $50,000 he didn’t give up, he changed direction to integrate his life-saving helmet technology into other products to help prevent brain injuries.

After raising $15,000 on Kickstarter to fund a helmet that would better protect bicyclists from concussions, but missing his goal of $60,000, Nate Saam had to figure out what the next step would be for his company.

“When they talk about startups they always talk about the pivot,” Saam said.

“The failed Kickstarter helped change our focus from creating a high end bicycle helmet to getting some of the technology we have created out in other products.” So when other manufacturers began talking with the company, Saam realized he had more options available.

The change opened up a whole new world of questions as Saam entered into negotiations with other companies.

“What is my technology worth? What are they willing to pay? Does it align with my core values?” said Saam. “It makes a difference, because you’ll work harder, for longer periods of time… it has to be about more than just the money, it has to be about the goal.”

Recalling the experience, Saam would do things a little differently if he were to try it over again, possibly hiring a team specifically to focus on the creation and management of the Kickstarter campaign.

But there’s no going backward in entrepreneurship, and to Saam it all comes down to one thing:

“What do you want to live for? What’s going to be your mark on this world?”

And for him that answer is straightforward, protecting people and saving lives.

Read the full story of how Nate Saam overcame traumatic brain injuries to become a business owner.

Approaching complexity with compassion

Ever before graduating from the Global Social & Sustainable Enterprise MBA, social impact has been on her mind. Now as a teacher, Wright is working to equip the next generation of business leaders with an understanding of how their skills and knowledge can be used for good.

“Anyone can start up a crowdfunding campaign for an idea they have, and the ability to just do that is really powerful,” Wright said.

“When I think about emerging markets, crowdfunding enables people to have access to capital that they wouldn’t have otherwise.”

That impact isn’t just limited to business owners, but can extend the benefits of local entrepreneurship and solve problems in communities that previously had troubles finding financing.

In 2013, the World Bank published a report estimating that the crowdfunding industry could reach annual totals of $96 billion globally by 2025 if the financing strategy is able to gain broader acceptance in foreign markets.

It’s for anyone

“Crowdfunding has opened up access to funding that was a lot harder to get in the past. In order to get funding from an angel investor or a venture capitalist you generally have to have a network in place,” Wright said.

“It isn’t just for the elite connected few anymore, it’s for anyone, anyone can try.”

China currently ranks as one of the most difficult countries to start a business and the crowdfunding boom is adding more options for small and medium sized businesses to finance their growth in an increasingly competitive marketplace.

But the gains don’t come without challenges, such as the time and money it takes to develop a crowdfunding campaign, disconnected payment systems in many countries, and slow regulatory action.

However, amid the difficulties, social entrepreneurship stands apart with powerful stories that can help position companies and nonprofits to connect with consumers and generate more sales and donations

College of Business Global Social & Sustainable Enterprise MBA students, Austin Bell, Bishal Kafle and Javier Echeverria spent their summer researching coffee production and distribution while travelling through Latin America.

1. Plan ahead

Many budding entrepreneurs don’t realize the amount of work that goes into building a Kickstarter campaign, from promotion to developing a realistic financial goal and creating a product or service that’ll catch people’s attention.

“Things don’t just happen, you need a strategy for how your crowdfunding page is going to get from one person to the next, to the next, and then to the 10,000th person from there.”

2. Tell a story

Without a strong story about what you’re hoping to deliver, and why you’re trying to deliver it, an audience may have trouble connecting with your campaign.

Leveraging the social benefit of entrepreneurial projects, like creating jobs or services that haven’t previously been available to a community, can provide an edge in a crowded marketplace – and help people!

Over the summer Global Social and Sustainable Enterprise MBA students worked to implement human-centered designs in East Africa, including installing a solar generator to help a rural business owner.

3. Remember the fundamentals

“You have to think about your value proposition,” said Wright.

It’s not enough to be all style and no substance. What’s being offered has to meet a need for backers, whether it’s understanding how a charitable donation will support a community or why a product will benefit someone’s life.

“Just like any good elevator pitch, you have to really clearly state the problem you’re trying to solve… and make them buy into your solution.”

One of the more common problems Bajtelsmit sees entrepreneurs face is underestimating the capital they’ll need to start their business and support themselves while getting it off the ground.

“I try to help them figure out how much money they need,” said Bajtelsmit, recalling her standard inquiry to those who might not have thought everything through: “Really, you’re going to work for free for six months?”

But with greater access comes a greater need to understand what is driving the growth, how to approach crowdfunding with practical expectations, and things to be careful of.

Background to the boom

There are two main types of crowdfunding:

Donations crowdfunding

Includes charity and rewards based approaches like Kickstarter and Indiegogo.

Investment crowdfunding

Encompasses debt crowdfunding, aka. peer-to-peer lending, where groups of people or businesses loan money to other individuals and companies, and equity crowdfunding, where investors can buy ownership in a company.

One of the most substantial industry changes came about following the 2012 passage of the JOBS Act, which created new funding opportunities by enabling businesses and entrepreneurs to solicit crowdfunded money in exchange for shares of ownership in their companies instead of offering goods or services.

The legislation has enabled startups to publicly advertise their investment campaigns and solicit funds from accredited investors, which they hadn’t been able to do in the same capacity with angel investors and venture capitalists.

However, Bajtelsmit sees pluses and minuses to the shift. There are of course more opportunities for entrepreneurs, but the easy capital allows ideas that might not be fully fleshed out to be fully funded.

Often times venture capitalists and angel investors push entrepreneurs for more details and long term strategies, screening some of the hype that can help crowdfunders become successful.

But according to recent research from the University of Cambridge, the crowdfunding market segment with the most growth isn’t helmed by Kickstarter projects, but rather by debt crowdfunding, which in 2015 reached a total of $25 billion in the U.S., dwarfing the $658 million raised by donations crowdfunding.

By removing banks from the equation, debt crowdfunding’s mission was to cut out the middlemen and blend altruistic lending – aimed at people who had trouble finding financing – with low interest rates and high yields for investors.

Yet challenges for backers have cropped up.

When LendingClub, the world’s largest online peer-to-peer lender, first began trading on the New York Stock Exchange its stock price hit $24 a share. However, less than 3 years later prices have fallen below $5.

“Peer-to-peer lending is a good example,” said Bajtelsmit. “You have no right of recourse, and there are many other legal protections you may be missing.”

However, as the industry and competition have grown, the makeup of lenders has changed. Individuals and businesses are being eclipsed by hedge funds, banks and institutional investors looking to add blocks of crowdfunded loans to their portfolios.

The majority of the debt crowdfunding’s borrowers are refinancing credit card debt, and both charge-off rates and debt to income ratios at the world’s largest online peer-to-peer lender,LendingClub, have risen substantially in the past few years.

Some analysts are worried that the rapid expansion of available credit could lead to an economic collapse similar to the subprime mortgage crisis that kicked off the recession in 2007. As debt crowdfunding sites work to penetrate the mortgage market – which makes up the lion’s share of $8.6 trillion in American housing debt – and peer-to-peer lenders begin to chase the $1.2 trillion student debt market, questions have arisen about what would happen to default rates if the economic climate took a downturn.

Even amid challenges, Bajtelsmit sees the overall growth in access to capital as a good thing.

“I actually do believe we can let people be somewhat responsible for their own decisions, but we should protect people who are at risk of being taken advantage of.”

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The College of Business at Colorado State University was founded in 1966 and consistently ranks among the top 10 percent of business schools in the nation. With over 2,300 undergraduate students in Fort Collins, and the largest MBA program in the state, the College of Business strives to fulfill the University’s land-grant mission by increasing access to education, promoting research, serving the community, and pursuing academic excellence.